TACIS functions similarly to the EU financing mechanisms that apply to other areas of the world. In other words, it is based upon proposals submitted for projects that are founded upon the general principles determined by the EU.  An essential function of the program is the element of conditionality. That is, assistance is provided under specific terms primarily concerning the receiving States' approach to the democratic model and the market-oriented economy.

The intervention and supporting fields include: the restructuring of public sector enterprises and the strengthening of the private sector, the agricultural structures and the power and telecommunications networks, as well as the promotion of safe utilization of nuclear energy, environmental protection, reformation of the administration, etc.

TACIS activities include:

• National Action Programs, which are available on a national level, for each State separately 
• Actions, on a regional level, which pursue regional cooperation and realization of broader development plans.

National Actions

On a national level, TACIS operates on the basis of an Indicative Program, which is agreed upon by both the Commission and the State involved, and which extends across a two-year period.  The Indicative Program reflects the general priorities set down in the text of the Regulations.

TACIS's fundamental priorities over the course of the seven-year period between 2000 and 2006, and within the framework of assuming national initiatives, include the increase of trade activities, network development, the increasing of investment flow, regional cooperation regarding environmental issues, cross-border cooperation, and collaboration regarding Justice and Home Affairs issues.

The six specific priorities, which have been set with the intention of achieving the above-mentioned objectives, are: 

1. To support structural, legal, and administrative reforms 
2. To strengthen the private sector and to administer assistance for economic development 
3. To provide support in confronting the social consequences of a transfer to a free-market economy 
4. To develop infrastructure networks 
5. To promote environmental protection and to manage natural resources 
6. To develop the agricultural sector of the economy

From the six above-mentioned pillars, three pillars, which also constitute those sectors upon which the specific State's National Program focuses its actions during the subsequent two-year Indicative Program, are chosen for each State.

• Cross Border Cooperation Program
  The Cross Border Cooperation Program is included within the framework of TACIS's national actions. The Cross Border Cooperation Program is designed to confront problems intrinsic in the management of borders.  The reason this specific program is distinguished from regional actions described below is the fact that the programs under completion focus upon bordering States as their primary and only objective, rather than expanding within an extensive domain. At the present moment, only the Western States, CIS (Russia, Ukraine, Moldova, and Belarus) have been inducted in the program in question. 
• Nuclear Safety Program
  Within the framework of the National Programs for Russia and Ukraine, programs concerning Nuclear Safety, which began in 1995, are being implemented in these countries. 
• Small Projects Program
  One last program that is included in the national actions of TASIS is  the Small Projects Program, involving small projects, the budget for which does not exceed 1 million euros.

Regional Actions

TACIS regional actions aim to create a cooperative atmosphere between the CIS States, which will essentially assist in removing any problems in existence that concern relations between them, and broader infrastructures that vital to the development of relations between the EU and these ccountries.

The program is primarily in effect within the following fields: 

• promotion of infrastructure networks 
• environmental cooperation 
• action implementation within the Justice and Home Affairs (JHA) sector

More specifically, the "Indicative Regional Cooperation Program" and the annual "Action Programs" for the period 2000-2003 provide for:

• promoting cross border transportation networks, power and telecommunications (30-40% of the program),
• cross border environmental initiatives (30-50%) 
• cooperation within the JHA sector, for example, narcotics trafficking, money laundering, etc. (15-25%). 
• Networks

1.      INOGATE (Interstate Oil and Gas Transport to Europe)

This program began in 1995, with the participation of six countries, and continues to day with 50 countries, ten of which are eligible for funding.

The Program's Objectives include: 

• the maintenance and upgrading of regional oil and gas networks
• the evaluation of alternative or complementary oil and natural gas conduits from the Caspian and Central Asian areas towards Western European countries 
• the improvement of energy trade on a regional level.

2.      TRACECA (Transport Corridor Europe Caucasus Asia)

This program began in 1993 for the purpose of creating a transport corridor between the West and the East, from Europe and the Black Sea in Central Asia, via Caucasus and the Caspian Sea.

Following the initial operational stage of the program for the period 1993-1995, the signing of the Basic Multilateral Agreement on International Transport of Baku (September 1998), played a decisive role in the program's advancement. The twelve member countries of TACIS (Moldova, Ukraine, Georgia, Armenia, Azerbaijan, Uzbekistan, Kazakhstan, Kurdistan, Tajikistan, Turkey, Romania and Bulgaria) ratified the Agreement, whilst Russia's application to participate remains pending. The Agreement emphasized the significance of reinforcing the Caspian Sea-Black Sea connection - since all the countries bordering on the Black Sea are already involved in this Program - as well as the exploitation of the natural pathway that unites Europe with Asia.

In March 2000, the first Intergovernmental Committee of TRACECA convened in Tbilisi.

• Regional Environmental Program

This program implements the procedure "A European Environment", which consists of development and implementation of the National Action Programs for the environment. Among other things, efforts are made to develop:

• Regional Maritime programs concentrating on the areas of the Black and Caspian Seas, Aralias, as well as the Danube 
• Immediate Relief programs for those areas damaged by the Chernobyl accident and assistance in solving difficulties such as flora and fauna restoration 
• Justice and Home Affairs Cooperation in the field of Justice and Home Affairs serves to fight money laundering and to encourage these countries to adopt specifications similar to those of  the EU.  Also, it serves to combat illegal production, selling, and trafficking of narcotics and psychotropic substances and minimize the demand for such products, as well as deal with illegal migration and slave trade. Following the events of September 11, 2001, these issues have been especially emphasized, while most of the additional programs anticipated will be oriented in this direction.

It is, however, perceived that because these actions expose weaknesses in the regimes of the participating states, reforms within this sector are progressing slowly.

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